Company driver vs. contract driver: what differs
A company driver is paid on a W-2; a contract driver doing the same work is paid on a 1099. The tax treatment, the benefits, and the deductible costs are different.
This is not owner-operator
A contract driver here means a 1099 driver who does not own the truck: the carrier or owner-operator provides the truck and pays for fuel, maintenance, tolls, and insurance. An owner-operator owns the truck and carries those costs, which makes the math different. This page covers the first case.
Tax treatment
A company driver has tax withheld, and the carrier pays half of Social Security and Medicare — 7.65% on top of wages. A contract driver has nothing withheld and pays the full 15.3% self-employment tax on net profit, of which one half is deductible against income tax. The Social Security portion of each stops at the annual wage base — $184,500 in 2026 — while the Medicare portion applies to every dollar. (IRS: Self-Employment Tax; Social Security Administration.)
Benefits
A company job may include the employer's share of health premiums, a 401(k) match, and paid time off, and employee status generally carries unemployment insurance and workers' compensation. A contract driver funds these independently. (U.S. Department of Labor.)
What a contract driver deducts
A 1099 driver is taxed on profit, so the costs of doing the job are subtracted first. Even without owning the truck, a driver commonly buys their own gear: boots, flame-resistant clothing, gloves, safety equipment, load straps, and electronic logging device (ELD) accessories, plus licensing, endorsements, and required medical exams. The truck, fuel, and insurance are the owner's costs; personal gear generally is not provided.
A driver subject to Department of Transportation hours-of-service rules — the federal limits on driving and duty time — who is away from home overnight can also claim the IRS special transportation-industry per-diem meal rate: $80 per full day on the road, 80% deductible. (IRS.)
Nothing is withheld
A contract driver pays the IRS directly through quarterly estimated tax payments (Form 1040-ES). See what to set aside for taxes. The Trucker Pay calculator compares a company-driver and a contract-driver offer from per-mile, percentage, or hourly pay.
Classification
Driving one carrier's truck, on their dispatch and their schedule, may not meet the tests for independent-contractor status — those tests are based on the working relationship, not on the contract signed. See W-2 vs 1099 take-home for the classification tests and the IRS forms that correct a misclassification.
Related
Estimates for planning, not tax advice.